63 Pages Posted: 14 Dec 2017
Date Written: July 2017
Policymakers need to understand innovation in high-profile sectors like technology. This can be surprisingly hard to observe. We combine UK administrative microdata, media and website content to develop experimental measures of firm innovation – new product/service launches – that complement existing metrics. We then explore the innovative performance of technology sector SMEs – firms also of great policy interest – using panel fixed effects settings, comparing conventional and machine-learning-based definitions of industry space. For companies with event coverage, tech SMEs are substantially more launch-active than non-tech firms, with suggestive evidence of firm-city interactions. We use instruments and reweighting to handle underlying event exposure probabilities.
Keywords: innovation, ICT, data science
JEL Classification: C55, L86, O81
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